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Anyone With Short Sale/Forclosure Experience?

We have been trying to do a short sale to avoid foreclosure. Our home has been on the market 171 days. We have gone from 285,000.00 down to 249,000.00. Our realtor emailed me this morning telling me sales are down in this area by 22% over the past two months. He also said only one comparable property in my neighborhood has sold in the past month after 189 days and for 215,000.00. He said the only other comparable property in my neighborhood right now is on the market for 218,000.00, it has one less bedroom and one less garage. He seems to think we should compete with this home. He says if we don't and the bank takes the home we will owe way more than if he sells it. I just don't know, it seems like dropping it THAT low is crazy! BTW the date the bank auctions the house is Sept. 15th. I just don't believe the bank would let the house go for so little. Also he wants to send in a false contract to put off the auction.

Answer Question
 
JennyBelle

Asked by JennyBelle at 8:54 AM on Aug. 27, 2010 in Money & Work

Level 2 (9 Credits)
Answers (5)
  • If your house sells at auction, it will be drastically lower than market price - I've seen houses here go for $95k when they were appraised at well over $200k. The market is really bad. It's hard to sell a house that is priced way over what the other houses in the neighborhood are selling at - the value of your home is only what someone is willing to pay. If it were me, I'd see what the realtor can do, I'd bet that he can get a higher price than the auction will bring. (If you have the ability in your area, see what the selling prices are at auction in your area, this will give you an idea of what the auction price may be.)
    Scuba

    Answer by Scuba at 9:09 AM on Aug. 27, 2010

  • In this market you may have to go that low unfortunately. The banks don't like either but would rather eat the difference in short sale than lose the ENTIRE mortgage value in foreclosure.
    KairisMama

    Answer by KairisMama at 9:10 AM on Aug. 27, 2010

  • ok, thank you girls. I just emailed him back and told him to drop to 220,000.00 today. I am still real ify on the "straw man" contract. I don't want to do anything that could possibly be labled fraudulant.
    JennyBelle

    Comment by JennyBelle (original poster) at 9:50 AM on Aug. 27, 2010

  • If you can avoid it, don't go the short sale or foreclosure route. It'll stay on your credit report for 10 years and could make it more difficult, if not impossible, to get a mortgage or another large loan in the future. Auction is hit or miss as to how much you'd get. You can't control the weather the day or the auction or who shows up. If it isn't nessessary to move, can you wait out the job market? Or maybe put the house up for rent if you do have to move?
    HotMama330

    Answer by HotMama330 at 11:47 AM on Aug. 27, 2010

  • My dad worked for Trans Union Credit and informed me that a short sale will not hurt your credit like forclosure would, that really credit should remain unharmed. The DOWNFALL to a shortsale is that whatever the mortgage company forgives on your loan, you have to claim as additional income come tax season, and will most lileky OWE taxes on that income. If your lender forgives $60,000 of your loan, that's $60,000 you'll be expected to pay taxes on later. Either way there is a NEGATIVE catch. :(

    KairisMama

    Answer by KairisMama at 10:37 PM on Aug. 27, 2010

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